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Great article! Thanks so much for making all these points.

Hi Lindsay Hope you got your misunderstanding right by our champion -BK again. You can learn more from BK than your keyboard.

Both ‘Vailala’ and Bryant Allen address the relationship between the problems of landowner identification, landowner representation, and the distribution of landowner benefits. Both seem to think that the question of how to distribute the benefits derived from a large-scale resource project can be resolved by mediation or by custom without the need for an answer to the question of who counts as a landowner in the first place or how the people identified as landowners ought to be represented in the negotiation of a benefit-sharing agreement. The implication would seem to be that benefits can be distributed to everyone’s satisfaction while people continue to contest the question of entitlement through the Land Courts or the Land Titles Commission. These matters were debated at great length by the members of the ‘Action Team’ that framed the relevant provisions of the Oil and Gas Act in 1998. The argument put forward by the operators of the Juni power station (then BP) was that the best way to make a cash payment to local landowners was to call a meeting of all those who thought they were entitled to receive a share and then hand over the money, in cash, to the ‘big men’ who emerged from the crowd. The crowd would then follow the leaders around until everyone had received a share of the money that was somehow accepted as a customary reflection of their relative degree of entitlement. This was the method of payment preferred by the former colonial officials (kiaps) who had been trained in the practice of ‘land investigation’ (to solve the problem of landowner identification) and the appointment of ‘clan agents’ (to solve the problem of landowner representation) during the late colonial period. Some of these men had since been recruited by mining and petroleum companies to deal with such issues. Those working in the petroleum sector had already begun to realize that the problems of identification and representation might have no practical solution in areas as large as the rectangles that constitute petroleum licence areas, let alone in areas occupied by Huli people who simply love to argue, inside or outside of the courts, about who owns what and who represents whom. But how could such knowledge be inscribed in legislation? From a strictly logical point of view, the landowners in each licence area have to be identified before a decision can be made about how they should be organized for the purpose of negotiation with the government or the developers, and that question has to be resolved before a decision can be made about the distribution of landowner benefits. The Oil and Gas Act clearly reflects this logic. But how are landowners to be identified when it is not feasible to undertake the kind of land investigation that might determine who has what customary rights over every square metre of land in a licence area covering 81 square kilometres? The Action Team did not think that ‘social mapping’ could provide an answer to this question. The primary aim of a social mapping study is to identify the customary principles and procedures that would be most appropriate to the resolution of all three problems (identification, representation and distribution) in each specific licence area, recognizing that such customs vary widely between different parts of PNG. The lawyers who actually drafted the legislation added the task of landowner identification because they thought that the primary aim of an SMLI report was to help the Minister decide who should be invited to represent the landowners at the ‘development forum’ where benefit-sharing agreements are negotiated. The legislation reflects a general agreement that the developers should fund the production of SMLI reports on the basis of the ‘user pays principle’ that also applies to the production of environmental and social impact studies under the terms of the Environment Act. If the government were responsible for funding the studies, they would not be done properly or not be done at all. However, this does not mean that the developers (or their consultants) have been given the right or the responsibility to solve the problems; they only have an obligation to provide relevant information to the government. The Action Team had to consider the extent to which the problems could be solved in the terms of the legislation itself. Some members of the team thought that all three problems could be partially solved by a requirement for landowners to be members of incorporated land groups (ILGs) whose executives would then become the negotiators of agreements and the primary recipients of the landowner benefits that they would then distribute to other groups members in accordance with ‘local custom’. But other members of the team (including the anthropologists) were already aware that ILG formation had created as many problems as it had solved around the Kutubu project, and was turning out be even more problematic in areas occupied by Huli landowners because of the peculiar nature of their customary social organization. That is why the Oil and Gas Act allows for alternative forms of landowner representation. In 2006, officials in the Department of Petroleum and Energy decided that land group incorporation might not be the best solution after all, and proposed that landowner benefits should be distributed equally between all the individuals identified as genuine landowners. But since lists of individual landowners had not been provided in the SMLI reports for the prospective LNG project licence areas, this meant that another round of studies would have to be undertaken, and these would be very expensive and time-consuming because they would begin to approximate the kind of land investigation that had previously been ruled out. In this case, the developer was not prepared to pay for them to be undertaken and the government was not prepared to force their hand. One might be tempted to suggest that the problems could have been solved if the government had already produced a regulation that required the identification of individual landowners in each SMLI report. But that would miss the point made by both of the commentators on my original post. The real problem lies with the institution of the development forum. As matters stand, this is an institution that only produces an agreement about the size and shape of the total package of benefits to be allocated to landowners; it does not produce an agreement about how the benefits should be divided between them. From this point of view, the belated intervention of the courts is a remedial measure that is unlikely to produce a lasting remedy. Nor is it realistic to expect existing legal institutions to produce a solution to the problem of distribution before a development forum is convened and a development licence is granted. They simply do not have the mandate or the capacity for this task. The only feasible solution is to expand the scope of the development forum itself or create a sort of parallel forum to deal with the distributional issue. Only then can the government make more sensible decisions (and regulations) about the type of information that needs to be provided in SMLI reports.

Hi Lindsay and thank you for sharing you view on this issue. It is certainly an interesting view taking into account the decision to step in to seek a stay was after I was approached by Provincial Paediatrician for Madang General Hospital, who explained that some 600 rural health officers that he communicates with on regular basis, providing life saving health information to treat critically sick children and mothers having child birth complications. As to your question how I would rather spend my time? Hmmm roads and infrastructure or the welfare of sick children and mothers facing birth complications ??? How a learned person, who has been afforded a tertiary education and yet appear so morally confused on such an issue is a question I'm more intrigued about?

It seems to me - 30% loans each fortnight....to those improvised keeps them deep in a poverty trap. This appears normal practice in urban PNG. What is the consensus around this practice?.

Its sad to learn that workers under these schemes do not work on holidays. I guess its due to labor laws where workers should be paid double time? (at least more than the usual hourly rate). I totally agree to visa free conditions not only for workers but families as well. some reports of the last scheme stated the hardworking natures of workers from the Pacific. I wonder how this program could facilitate genuine workers who through their experiences would like to apply for permanent residency because of environmental issues at home. While it is not an easy topic because of national interest of both send and destination countries, it would certainly be great to have options as such under PLS.

Kudos to Bryan Kramer for standing up for the silent rural majority. In retrospect however, would you rather expend your time and energy on providing much needed leadership to resolve more demanding socioeconomic and infrastructural problems being experienced in Madang District - your district? Madang town once dubbed the 'pearl of the pacific' has dire law and order problems that need immediate attention. The state of the town's road infrastructure is in shambles and needs urgent attention. The present ongoing political interference destabilizing a previously perfectly functioning provincial public service machinery has directly affected basic service delivery at the rural level. Perhaps the question here is; would you rather spend your time and energy on trying to resolve a national issue or deal with pressing local issues that demand your immediate attention?

Thanks Denghua I can understand from your discussion; how China’s domestic economics, foreign diplomacies and global image have played out in the modern world. The establishment of the new aid agency will hopefully do better to achieve China’s broader foreign policies for a community of common destiny. The communities of Islands in the Pacific would very much be interested in being part of President Xi’s new initiative and benefit from the Belt and Road Initiative. The diplomatic tug-of-war between China and Taiwan is something the Pacific Islanders would not consider much but they will look towards development aid offered by the two countries and their own domestics needs. Apart from China and Taiwan diplomatic contests in the Pacific, China is also posing a threat to Pacific Islands traditional partner – Australia. There is a growing concern in Canberra that most Pacific Island countries are drawn into China’s Belt and Road Initiative and Australia needs to reshape its AusAID program into the Pacific. After all, the bigger institutional changes taking shape in China’s foreign aid program will impact foreign diplomacy of other countries. Pacific Island countries will be lucky to benefit/loss in this new China Aid Program.

Australia's Seasonal Worker Scheme and the yet to kick off Pacific Labour Scheme, which are of substantial benefit to Aust, make the labour resource through the Pacific region a very valuable commodity

Well said Bryan Kramer.

I believe that this research only points to one side of the coin. It presents the lender's point of view and lacks the borrower's point of view. It is estimated that 15% of the 7.7 million population are currently in the workforce and living in towns and cities. This means that approximately 85% of people live in the rural areas. In my research titled "Alleviating poverty through micro credit: Papua New Guinea Case study". I focus my research on the borrower's perspective, I found out that there are two very important problems that the borrowers face. The first one is accessibility - micro finance institutions are based in certain commercial centers. E.g. PNG microfinance in Mt. Hagen is serving almost all of the population of half a million people in WHP and JIWAKA. Just imagine less than 10 bank officers serving 85% of almost 500,000 people of Jiwaka and Mt. Hagen. A customer said she has to wait for hours just to find out that she does not have the historical cash flow or/and cash collateral to obtain the loan. So left and never went back again. She also discourages other people to seek loans with these finance companies. The other customer said "He travels for hours to come to the bank to find out that he had to wait again for some hours to get served. If he had to wait then he will miss the only PMV back to his village so he didn't want to try. The first problem is accessibility. Banks focus so much on risks and overhead costs that they discourage people from accessing their credit facilities. The other problem is loan requirements. I interviewed a mother in Madang and she said, "In order for me to get a K15000 loan from Peoples Microbank, I had to offer my husbands van as a collateral and at the same time write a business plan including projected cash flow, income statement and Balance sheet. Just image a Gr. 10 leaver being asked to provide all these. As an Accountant and MBA I couldn't understand too. She didn't went back to Peoples Microbank again. She even discourages others from going there too. It is all about convenience, not about risk or demand. See how BSP is successful. The electronic channel is their green gold. They have more than 200 ATMs and 12000 Eftpos all over PNG. Even though they charge a lot of fees, people still go for it. It all about convenience. People will pay any cost to consume it. The other example in Digicel; they have towers all over PNG. Even though some customers complain about voice calls fees or their credit disappearing, they still use Digicel because its accessible almost everywhere. Hence, those who want to do further research please see also the customers point of view.

Yes Bernard but Australia GIVES aid (FREE) and CHINA loans (NOT FREE).